Definition of Adjustable Peg
What is an "adjustable peg"? What is the definition of an "adjustable peg"?
A "currency peg" is when a country adopts an exchange rate policy where their national currency is fixed to a major currency such as the "Euro" or the "US Dollar".
An "adjustable peg" is when a country has a fixed exchange rate policy that can also be narrowly adjusted over time.
China, for instance, has an adjustable peg policy. China artificially keeps the value of their currency low in order to subsidize cheap exports.
China's adjustable peg policy has been the subject of much scorn from the United States, with some claiming that China is a "currency manipulator".
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